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Investors hail President Bush!

Perhaps even more than most Americans, Wall Streeters were following this election campaign very carefully. Why? Because, while yes, this was a contest between two more or less centrist candidates, there were real distinctions between George W. Bush and Al Gore, especially with regard to where they come down on financial issues.

First off, let’s be clear that Wall Street wouldn’t have been unhappy with either candidate. Second it’s hard to see how either guy would have really moved the market one way or another, especially over the long haul.

What’s important to recognize is that the president probably matters less today in terms of the economy than he did 20 years ago. Alan Greenspan, the Federal Reserve chief arguably wields more power than the commander in chief in this arena.

Another point: government spending as a percentage of GDP is much less than it used to be. For instance, the technology sector today is much bigger and more important than say defense spending, which is completely dependent on government outlays.

Having said that, however, the president-elect’s policies will certainly have a significant and direct impact on various sectors of the nation’s economy and your investment portfolio. Let’s check it out.

A Bush Presidency

It’ true that CEOs and Wall Street heavy hitters prefer George W. That’s because while Gore may have been business friendly (which after all is why Ralph Nader ran, right?), George W is more business friendly.

Another point, Bush will be much more reluctant to block big mergers based on anti-trust objections. So look for more big deals to go down and get approved (i.e. AOL and Time Warner.)

Here then are some sectors and specific stocks which should make out in the new administration:

Oil and Gas. You can expect that the oil and natural gas businesses will be in good stead. Remember, both Bush and his running mate Dick Cheney are oil and gas guys.

Stock Picks: ExxonMobil (the big Kahuna) and Halliburton (at the very least, it’s hard to see Cheney;s alma mater getting hurt in a Bush administration.

Defense. No question that while Gore wouldn’t have seriously cut back military spending — it’s pretty bare bones right now, relatively speaking — George W. will spend billions more. That means more dollars flowing into defense contractors and aerospace companies.

Stock Picks: Northrop Grumman, Lockheed Martin, Raytheon, and Boeing.

Tobacco. Say goodbye to going after big smoke. Or, as the punsters might put it, a cloud will likely get lifted from over this business.

Stock Picks: Philip Morris, which by the way, is already up over 50 percent this year; RJR and UST.

Microsoft. The biggest company in the world by market value, could get a lot bigger if George W has his way. Why? Well, the whole anti-trust case could well be kaput. While George W. hasn’t said so directly (he’s gone on the record as being unwilling to comment on on-going cases), he has smiled and said something to the effect of, he really believes in letting markets sort things out.

Stock Picks: Buy MSFT.

Telcos. Remember, Texas is home to one of the last regional Bell companies. Bush may favor these guys over the long distance carriers. The Bells want relief form the 1996 Telecom Act which inhibits them from entering the data business in local markets.

Stock Picks: Buy SBC, the pride of San Antonio. And Verizon.

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